UK Landlord Forum / Life

My tenants pay their rent late every single month.
I have been patient.
I have been understanding.
I have listened to every excuse in the book.
We have changed rent payment dates to try and help.
They have always paid - eventually - sometimes 5 days, 20 days, 12 days late.
It's driving me nuts. Do i just have to be grateful that they do eventually pay or can i penalise them - late payment charge? Charge interest on arrears?
Advice would be sincerely appreciated!

What does it say in your AST?

I don't think it says anything about arrears! Is there any standard legal step i can take? They've never been long enough in arrears to start proceedings. Can i write to them to let them know that from now on every late payment will incur a £10 penalty fee?
Thanks

Ultimately you need to decide if this is a deal breaker, if it is, when any fixed period of tenancy is up, serve them with notice to quit.

Or have a quiet word?

It is annoying, but its not personal, some people pay late in life and business.

Quote from: kirstym on September 21, 2014, 10:27:43 AMCan i write to them to let them know that from now on every late payment will incur a £10 penalty fee?

You can. I wouldn't pay any attention to you, though, as it's not laid out in the AST. The AST is what they signed. Of course, the AST probably also says something about them paying on-time or a certain date, and they aren't... but sadly you can't just go around changing the terms and conditions of what you've signed (and, in fact) what you asked them to sign.

Some Landlords like to put in clauses about interest on late payments... but it is next to useless.

Example... £750 per month rent... late for 20 days (your worst case, I think)... say, at a punitive rate of 8%... that interest adds up to £3.28... hardly worth the bother.

As boboff says... towards the end of their fixed term, consider your options... maybe a Section 21 will focus their mind enough to keep them on, maybe you will follow it through and get new Tenants. Is it not clear from your post whether they are in a fixed term, but we are making that assumption.

Actually you CAN'T impose a fixed penalty charge EVEN if it is in your AST because the Office of Fair Trading says that they are unfair.  Also rent is not considered overdue until it is at least 14 days past due date.

What you CAN do is charge your actual costs, daily interest, a real bank charge that you can prove you got because of their late payment.

Here is the way I would handle it

"hey Jonny, I like you, I am generally happy with the way you look after the property but we have a problem; these late payments" 

"As a landlord these make me nervous because although you always make it up in the end I know that one day your luck may run out and I will end up having to sue you.  It is also affecting my cash flow and if I get charged £25 by the mortgage company for a late payment I will have to pass that on, also if I lose my preferential interest rate because of your late payment I will have to pass that on.  You see YOUR failure to pay is affecting MY credit worthiness and it has to stop."

"So I have a few choices, I can increase the rent in accordance with local increases, I can give you notice and find a tenant that pays on time or we can agree that from now on you are going to pay on time.  What some tenants do is pay me an extra months rent in advance when they are flush, then they pay the rent within a few weeks of the due date so they are never in arrears, would that work for you?"

"Now to protect myself I have to issue you with this notice to let you know that I am going to end your tenancy at the end of the fixed term (or in two months if they are out of the fixed term) now if you can show me between now and then that you can pay your rent on the due date then I will offer you a new tenancy, otherwise I am sorry but you will have to go"

His response to this will tell you what you need to do, if it is violent or agressive then stick with the S21.

If you want to be a complete pain in the arse drain your bank account and let it get bank charges and the mortgage one too when the payment does not go through, then pass on those real charges, but of course they affect your credit rating.

Quote from: RickC on October 03, 2014, 12:10:03 PM
If you want to be a complete pain in the arse drain your bank account and let it get bank charges and the mortgage one too when the payment does not go through, then pass on those real charges, but of course they affect your credit rating.

That's just a completely stupid idea.

I agree, that is why I said if you want to be a pain in the arse.

It's good to have you on board, but if your advice is intended to be jovial please try to make use of some smilies, or summat, to indicate the fact that your suggestion is not really serious. I think most would understand the last comment was a bit throwaway, but some might not. I am sure you'll calm down after a few weeks / months...